USAF Valuation

RNS Number : 2231Z

Unite Group PLC

11 January 2011

 



11th January 2011

THE UNITE GROUP PLC

("UNITE", the "Group", or the "Company")

31 DECEMBER 2010 VALUATION OF

THE UNITE UK STUDENT ACCOMMODATION FUND

The UNITE Group plc, the UK's leading developer and manager of student accommodation, today reports the Estimated Net Asset Value* ("NAV") of the UNITE UK Student Accommodation Fund (the "Fund") as at 31 December 2010.

The NAV as at 31 December 2010 was £0.808 per unit, reflecting an increase of 1.1% during the fourth quarter and an uplift of 6.0% in the 12 months to 31 December 2010 (30 September 2010: £0.799 per unit, 31 December 2009: £0.762 per unit).

The principal components of the movement in the value of the units were as follows:

Effect on Estimated NAV per unit:	Q4	2010
Movement in property values	0.5%	8.6%
Movement in swap values	1.8%	-0.6%
Acquisition and debt arrangement costs	-1.3%	-1.6%
Other factors	0.1%	-0.4%
Increase in Estimated NAV per unit	1.1%	6.0%
Increase in underlying gross property values	0.4%	5.7%

In arriving at the value of the Fund's units, its property portfolio, now comprising 21,697 beds in 64 properties across 20 UK markets, was independently valued at £1,231 million.

The movement during the fourth quarter represents an increase of 0.4% in the underlying gross property values (excluding those acquired in the quarter), driven by 0.4% of quarterly rental growth. With the majority of rental growth typically being recognised in the first half of the year, in line with the lettings cycle, the outlook for 2011 remains in the 3-4% range. Valuation yields remained stable during the quarter.

In the 12 months to 31 December 2010, the value of the property portfolio held throughout the year increased by 5.7%, driven by an average 13 basis points of yield compression and 3.5% of rental growth.

Following these movements and the acquisition of a portfolio of assets in the quarter, the average net initial yield of the portfolio held at 31 December 2010 stood at 6.67% (30 September 2010: 6.70%, 31 December 2009: 6.84%).

*Estimated Net Asset Value represents the capital position of the Fund and does not include undistributed income.

Commenting on the Fund's valuation, Joe Lister, UNITE's Chief Financial Officer, said:

"USAF has delivered another strong performance in 2010 with 6.0% NAV growth and a total return of 11.0% to investors. The NAV growth has been driven primarily by rental growth reflecting the ongoing demand for good quality, well located student accommodation."

*Estimated Net Asset Value represents the capital position of the Fund and does not include undistributed income.

For further information, please contact:

The UNITE Group plc Mark Allan, Chief Executive Joe Lister, Chief Financial Officer	Tel: [phone]
Financial Dynamics Stephanie Highett Dido Laurimore Laurence Jones	Tel: [phone]

About The UNITE Group

The UNITE Group is the UK's leading developer and manager of student accommodation, with a business model that focuses on four core areas;

1.    Development: UNITE undertakes the acquisition, planning and development of purpose-built student accommodation in the UK.

2.    Professional property management: UNITE is home to some 40,000 students and has consistently proven high occupancy levels across its portfolio.

3.    Proactive asset management: Through the continuous assessment of quality and location of its investment portfolio, UNITE are well positioned to deliver value adding strategies to those assets where further opportunities are identified.

4.    Co-investing asset management: Working on behalf of its partners, UNITE acts as Fund Manager for the UNITE UK Student Accommodation Fund in addition to being 16.3% shareholders. UNITE also manages a number of Joint Venture partnerships.

UNITE works closely with universities and colleges, in order to deliver high quality, well-located student accommodation at affordable prices in strong higher education markets.

Founded in 1991, UNITE is listed on the London Stock Exchange (UTG).

The UNITE UK Student Accommodation Fund

UNITE established the UNITE UK Student Accommodation Fund at the end of 2006. The Fund helped transform UNITE's business model to that of a developer of new purpose-built student accommodation and manager of funds which own student accommodation properties operated by UNITE and in which the Company has a significant minority stake.

 The number of unitholders in the Fund is over 100.

www.unite-group.co.uk

www.unite-students.com

 

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